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No Additional Insured Coverage When Policy Is Interpreted As A Whole

“Blanket” additional insured provisions, or provisions that identify additional insureds by category or some qualification rather than by name, can become a point of contention between those claiming to be additional insureds and the insurers that issued the policies containing those provisions, particularly after a loss occurs. The determination is made in some instances by referring to other documents, such as a contract between the named insured and the claimed additional insured.

The case of The Boeing Co. v. Continental Casualty, 157 Cal.App.4th 1258 (2007), illustrates how the specific wording of the additional insured endorsement, alleged to be ambiguous, was interpreted not to provide additional insured coverage when read in the context of the whole policy.

Continental Casualty issued a liability policy to a nonprofit corporation called Christmas In April (“CIA”), which enlists volunteers to repair and rehabilitate homes of low-income, elderly and disadvantaged persons. CIA solicited companies such as Boeing for volunteers. A man was injured while working as a volunteer on a CIA project. He sued Boeing, alleging that Boeing was a joint venturer with CIA and his employer on the project, that his work was under Boeing’s direction and supervision, and that Boeing supplied him with a defective step-stool.

Boeing embarked on a search for insurance coverage. Boeing tendered its defense to Continental, asserting it was an additional insured under the policy issued to CIA. Continental declined the tender, stating that Boeing was not an additional insured.

An additional insured endorsement of the Continental policy included as additional insureds “any person . . . or an organization while acting as any agent for, or on behalf of the named insured, . . . however, such coverage will be granted only on written request of the insured . . . .” Because the endorsement used the phrase “the insured,” and not “the named insured,” Boeing argued that its written request to Continental qualified Boeing as an additional insured under the endorsement.

The Court of Appeal rejected Boeing’s argument, noting that the Common Policy Conditions section of the Continental policy stated that “[t]he first Named Insured shown in the Declarations is authorized to make changes in the terms of this policy with our consent.” In reading the additional insured endorsement in the context of the policy as a whole, the Court concluded that only the named insured, CIA, had the authority to request changes in the policy. As a result, Continental had no duty to defend Boeing.
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